Is the party ending?

The nation's retailers, sensing this, appear to be scaling back their holiday forecasts. That's wise, given government retail sales data pointing to a slowdown in recent months in everything from big-ticket items like cars and appliances to non-durables like clothing. But even with spending leveling off, debt from the great bull market party remains.

"Consumer spending hit record levels, but so did consumer debt," says Chris Low, chief economist at First Tennessee Capital Markets, a New York investment bank. "But now, we're in a very different economy, and people are beginning to feel the creeping pressure of debt."

Consider this: During the roaring '90s bull market, the average American -- armed with 13 credit cards -- went on a spending spree, and is now sagging under the weight of $7,500 in debt, according to a recent Chicago Tribune report.

And let's say those credit cards charge 18 percent interest. This year alone, that tacks on $1,350 to your $7,500 debt. That has to be paid off. But since most folks aren't saving anything, how?

So no savings + big debt = cash crunch. Last year, you could have taken a profit in the market to raise cash. Not this year.

"I'm not selling," says one Manhattan attorney who asked not to be identified. "I can't -- my portfolio's down and I don't want to take a hit." He owns tech stocks like Qualcomm, Dell and Microsoft -- all off sharply in 2000. His paper losses? "You don't want to know," he moans.

And anyone who got into the market on margin (borrowing cash from a broker to buy stocks) is really feeling the pain; not only are their stocks probably down, but they face interest charges on the loan, plus the possibility of the dreaded margin call -- when a broker demands that you put up more money to hold a stock, or sell and take a big loss. And it seems investors are up to their necks in margin debt. Trim Tabs, a California research company that provides market information to mutual and hedge funds, says margin debt, as a percentage of total stock market worth, now stands at levels last seen just before the October 1987 crash.

And home equity loans -- another source of cash -- aren't what they used to be either. The real estate boom shows signs of cooling off in places like Seattle and Dallas; even prices in mega-hot markets like Silicon Valley and Manhattan -- while still going up -- show less dramatic increases.

One thing is soaring though -- the number of bankruptcies, a sure sign that lots of people are in too deep. Forbes magazine, in its Oct. 2 issue, points out that more than a million Americans have filed for bankruptcy each year since 1996 -- up fourfold since 1979.

Contrarian gloom aside, there still will be lots of holiday cheer, though maybe a bit less than last year. Santa won't deliver any lumps of coal -- though given what oil prices are these days, that might not be such a bad idea.

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